ANSWER QUESTIONS 3 AND 4

WRITE CLEAR AND SIMPLE JOURNAL ENTRIES CREDITS DEBITS

Problem (III.) For the following transactions prepare the journal entry, (5 pt. cach, total of 50 pts.) Company uses a perpetual inventory system!!!!! 1. Purchased $350,000 of merchandise inventory on account from ABC Manufacturing Co., purchase terms 4/10 n/30, FOB Shipping. 2. Paid a shipping company $1,200 to deliver the above Merchandise Inventory to our store. 3. The business owner took $5,500 of merchandise inventory home to give as a gift to his wife. 4. Purchased $680,000 of merchandise inventory, we paid in cash. 5. Sale to customer Elmo on account $400,000, sales terms 3/15 n/30, cost of goods sold is $195,000. 6. Made a $10,000 sale to Paul/cost of goods is $4,000, but instead of Paul paying us cash we agreed that today he would fix our plumbing at a cost of $10,000. 7. Some of the merchandise purchased from ABC Manufacturing in 1. above was the wrong color, we kept the merchandise BUT ABC Manufacturing agreed to decrease/lower the purchase price by $7,000. 8. We paid ABC Manufacturing Co. the amount due within the 10-day terms. 9. From 5. above Elmo was not totally happy with the sale we made to him & he did not want to return the sale but to keep our customer happy we reduced the sales price by $2,000. 10. From Elmo we received the amount due, he did NOT pay us within the 15-day terms. Problem (IV.) Monica Shoe Retail Store (20 pts.) Jan. 1, 2018 beginning merchandise inventory 9,400 shoes at $35 cach Jan 13 2018 Purchased merchandise inventory 3,000 shoes at $38 each Jan. 18 2018 Purchased merchandise inventory 7,000 shoes at S40 each Jan. 26 2018 Purchased merchandise inventory 6,000 shoes at $43 cach During the January 2018 month we sold 18,000 shoes for $130 each. Calculate using LIFO the Cost of Goods Sold? (15 pts.) What was the Gross Profit? (5 pts.)